Evaluating Military Compensation

Introduction and summary. Defining military compensation ; Comparing military and civilian compensation ; Factors that complicate military-civilian comparisons -- Military pay, promotions, and rank -- Estimates of military compensation. Total compensation for enlisted personnel by years of experience ; Cash earnings for selected occupations -- Comparing increases in military and civilian pay. The "gap" between changes in basic pay and civilian earnings ; Issues in using the "pay gap" to evaluate military compensation ; Increases in regular military compensation versus the employment cost index -- Comparing levels of military and civilian pay. Cash compensation ; Noncash and deferred benefits ; General limitations of military-civilian comparisons -- Linking military compensation to recruiting and retention. Effectiveness of using pay to resolve occupational shortages or surpluses ; Effects of cash and noncash compensation on recruiting and retention -- Options to increase the visibility and efficiency of military compensation. Integrating the components of total compensation ; Increasing cash relative to noncash compensation -- Appendix A: Total compensation for the median enlisted member -- Appendix B: How pay changes with deployment -- Appendix C: Types of occupation- or skills-based compensation.

The purpose of this study is to develop a unified model that will permit an analysis of all the various issues relating to the military compensation system. This report develops a theoretical framework that allows an evaluation of the militarv pay and retirement system. Our analysis aims at addressing the traditional macroeconomic questions and two additional microeconomic questions that have received little attention: Does the system motivate personnel to work hard and effectively? and Does the system promote the best person/job/rank matches?

Compares pay and benefits provided to members of the Armed Forces (AF) with that of comparably situated private-sector employees to assess how the differences in pay and benefits affect recruiting and retention of members of the AF. The objectives were to: (1) assess total military compensation for active duty officers and for enlisted personnel; (2) compare private-sector pay and benefits for civilians of similar age, educ., and experience with similar job responsibilities and working conditions of officers and enlisted personnel of the AF; and (3) assess the 10th QRMC recommendation to include regular military compensation and select benefits when comparing military and civilian compensation to ascertain if it is appropriate.

Federal law mandates that every four years the Secretary of Defense conduct an assessment of the military compensation system, resulting in a Quadrennial Review of Military Compensation (QRMC). In response to this request articulated in Section 603 of the Senate Armed Services Committee version of the National Defense Authorization Act of 2019, the 13th QRMC is providing an assessment of the effects of a time-in-grade pay table for military personnel, particularly on readiness. A time-in-grade pay table would set pay based on pay grade and years of service within a grade, in contrast to the current time-in-service pay table, which sets pay based on pay grade and years of service inthe military.

Military compensation is a pillar of the all-volunteer force. It is a fundamental policy tool for attracting and retaining personnel, and its structure-and the incentives implied by its structure-can affect U.S. service members' willingness to join, exert effort, demonstrate their leadership potential, remain in the military, and, eventually, exit the military at an appropriate time. Military compensation is a composite of current pay and allowances, special and incentive pays, health benefits, disability benefits, retirement benefits, and other benefits. Its importance to the readiness and morale of the force is such that it is reviewed every four years to determine whether it is adequate to meet the U.S. military's objectives. To inform the 10th Quadrennial Review of Military Compensation, this monograph presents an in-depth examination of the mix and structure of the U.S. military's current retirement-benefit system and several policy alternatives. The study included the development of a model that was estimated and used to run a series of simulations based on active-duty and reserve personnel data to track the careers and potential decisionmaking of military personnel across the services. The simulation results were then assessed in terms of their cost-effectiveness and ability to meet the services' expectations for accession, retention, and career mobility.

PCS involves moving military personnel to new locations and is a key tool used by the military services to fill assignments both in the United States and overseas. In fiscal year 2014, DOD obligated $4.3 billion for approximately 650,000 servicemember PCS moves. Senate Report 113-176 included a provision for GAO to report on aspects of the PCS program. This report evaluates the extent to which (1) PCS per-move costs have changed since 2001, (2) military personnel are meeting time-on-station requirements, and (3) OSD's September 2014 study on increasing time-on-station addressed the elements in Senate Report 112-196 and used approaches consistent with generally accepted research standards. GAO analyzed PCS cost and move data for fiscal years 2001 through 2014 using fiscal year 2014 dollars; obtained and analyzed available time-on-station data; reviewed OSD's September 2014 report to Congress on increasing time-on-station; and interviewed OSD and service officials.